Sempra Energy reported today the launch of LNG project at Port Arthur Texas. The project is 70%-owned by SRE’s subsidiary, Sempra Infrastructure Partners, LP (Sempra Infrastructure). The company reached a positive final investment decision (FID) for the development, construction and operation of the Port Arthur LNG Phase 1 project in Jefferson County, Texas. ConocoPhillips in a joint venture with Sempra through an affiliate of COP acquired the other 30%, as a non-controlling interest in the project,
Highlights
- Sempra said the Port Arthur LNG Phase 1 project is fully permitted and is designed to include two natural gas liquefaction trains, two liquefied natural gas (LNG) storage tanks and associated facilities
- Nameplate capacity of approximately 13 million tonnes per annum (Mtpa).
- Total capital expenditures for the Port Arthur Phase 1 project are estimated at $13 billion.
- The long-term contractable capacity of approximately 10.5 Mtpa is fully subscribed under binding long-term agreements with strong counterparties —ConocoPhillips, RWE Supply and Trading, PKN ORLEN S.A., INEOS and ENGIE S.A., all of which became effective upon reaching FID.
- Sempra Infrastructure is also actively marketing and developing the competitively positioned Port Arthur LNG Phase 2 project, which is expected to have similar offtake capacity to Phase 1.
Sempra Infrastructure closed its joint venture with an affiliate of ConocoPhillips (NYSE: COP), as well as announced an agreement to sell an indirect, non-controlling interest in the project to an infrastructure fund managed by KKR.
Sempra Infrastructure also announced the closing of the project’s $6.8 billion non-recourse debt financing and the issuance of the final notice to proceed under the project’s engineering, procurement and construction agreement.
“Sempra’s selection of Port Arthur as the location for a new natural gas liquefication and export terminal is a strategic decision that will cement Texas’ position as the energy capital of the world,” said Texas Gov. Greg Abbott. “With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States’ full economic potential in such a critical industry. Expanding LNG is imperative to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans.”
Sempra Infrastructure announced an agreement whereby KKR will acquire a 25% to 49% indirect, non-controlling interest in the Port Arthur LNG Phase 1 project.
Pursuant to the agreement with KKR, Sempra Infrastructure will retain certain economic and other rights with respect to the interest being transferred while granting KKR certain minority interest protections. KKR is making the investment primarily through its Global Infrastructure Investors IV fund.
Sempra Infrastructure is targeting 20% to 30% of indirect ownership interest in the project, subject to the closing of the KKR sale.
For illustrative purposes, if Sempra Infrastructure’s indirect ownership interest is at the midpoint of the referenced range, or 25%, Sempra Infrastructure would expect its share of average adjusted EBITDA after full commercial operations to be approximately $410 million annually and its equity commitment to be approximately $1.55 billion. Sempra’s share of the above estimates would be equal to 70% of these amounts. The foregoing estimates exclude other potentially significant economic benefits associated with, among other items, the development of future phases and further optimization of the project.
About Sempra
Sempra is a leading North American energy infrastructure company that helps meet the daily energy needs of nearly 40 million consumers. As the owner of one of the largest energy networks on the continent, Sempra is helping to electrify and decarbonize some of the world’s most significant economic markets, including California, Texas, Mexico and the LNG export market. The company is also consistently recognized as a leader in sustainable business practices and for its long-standing commitment to building a high-performance culture focused on safety and operational excellence, leadership and workforce development and diversity and inclusion. Investor’s Business Daily named Sempra the top-ranked utility in the U.S. for environmental, social and governance scores and financial performance. Sempra was also included on the Dow Jones Sustainability North America Index for the 12th consecutive year. More information about Sempra is available at sempra.com and on Twitter @Sempra
About Sempra Infrastructure
Sempra Infrastructure delivers energy for a better world. Through the combined strength of its assets in North America, the company is dedicated to enabling the delivery of cleaner energy for its customers. With a continued focus on sustainability, innovation, world-class safety, championing people, resilient operations and social responsibility, its more than 2,000 employees develop, build and operate clean power, energy networks and LNG and net-zero solutions that are expected to play a crucial role in the energy systems of the future. For more information about Sempra Infrastructure, please visit www.SempraInfrastructure.com
Sources: Sempra Energy
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